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Wednesday, January 29, 2014

What do you do when the stock market is down?

If you follow the market (maybe as obsessively as I do)
you may have noticed that it has been less than stellar since the year begun. This
is a time when maybe a lot of people start fearing stocks and the reason why some
are afraid to start investing in the first place. Well, ironically, sometimes
(or, often times) a significant downturn in the market can be the perfect time
to enter for the first time or simply add to current positions of quality stocks
in your portfolio. As I have mentioned a few times on the blog—any ‘bad news’
in general can and will likely have an effect on the market as a whole.

As noted in my ‘about me page’ I first started investing
in 2008--- one of the worst years the
market had in a long time! However, my mentality was (and still is) to invest
for the long term. I keep track of the companies I invest in and as long as
they continue to deliver as expected and as long as I see a healthy future
then, I stay the course.

When the market in
general is not doing well Quality (and bad quality) companies may go down in
price. So, what does that mean for you? The possibility of getting great stocks
ON SALE! Just like you get excited when your favorite stores are having a great
sale, learn to get excited when the same thing happens in the market and do not
panic.

Remember – nobody can predict the future (if that were
the case we’d all be billionaires). Even after you buy the value of your investment
may decrease or increase so, don’t try to time the market. Simply keep a list
of prospective companies at hand and wait until they “go on sale” (as many
stocks are at this time). Don’t be afraid!!

Cheers to quality stocks, thinking long term, and reaping
profits!

I leave you with a quote by my favorite stock guru and something
I truly believe in:

“Investors should remember that excitement and expenses
are their enemies. And if they insist on trying to time their participation in
equities, they should try to be fearful when others are greedy and greedy only
when others are fearful." –Warren Buffet